CAC 40: Tight look to the East, the 6,760 points under close surveillance

(News Bulletin 247) – The CAC 40 fell 0.26% on Thursday after a once again very volatile session, the recent good news on the front of “real” consumption in the United States failing to offset fears related to the geopolitical situation between Moscow and NATO. While affirming that a diplomatic solution remains possible, the President of the United States now considers the threat of a Russian invasion of Ukraine to be “very high”. Before the UN Security Council, Secretary of State Anthony Blinken said this afternoon that Russian forces are preparing to launch an offensive “in the days to come”, adding that Moscow is looking for a pretext to trigger the hostilities. “I am here today not to start a war, but to prevent one,” he also said.

In terms of statistics, missed targets for the two main statistical publications of the day: weekly unemployment benefit registrations for week 06, approaching 250,000 new registrations, and the Philadelphia Fed manufacturing index (Philly Fed index), in very clear drop to 16 points.

On the value side, Kering (+4.95% to 663.90 euros) alone made it possible to limit the losses of the CAC 40, after publication of sales of its flagship brand Gucci which significantly re-accelerated between October and December, surpassing widely expected by analysts. The group’s sales and profits reached record levels, while its operating margin returned close to its 2019 peak. All the details can be found here. Among the strong variations linked to quarterly copies, we found in the Air France red and in the Carrefour green.

On the other side of the Atlantic, the main equity indices contracted again on Thursday, with an amplification effect for technology and growth stocks. The Dow Jones lost 1.78% to 34,312 points and the Nasdaq Composite 2.88% to 13,716 points. The S&P 500, benchmark barometer of risk appetite in the eyes of fund managers, lost 2.12% to 4,380 points.

A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.1370. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $91.70.

To follow in priority, on the agenda this Friday, at 4:00 p.m., the consumer confidence index in the Euro Zone and sales of old homes in the United States.

KEY GRAPHIC ELEMENTS

An oblique line of support gave way on Monday 02/14 under the sectorally federated assaults of the selling side, in a very high level of participation. This release of selling energy at this stage, in a single session (24/01), constitutes a major technical fact which characterizes the hypersensitivity of a market which is increasingly and continuously questioning the levels of valuation of the shares. . The entry into the bear market is not formally characterized, but the situation calls for the greatest vigilance under this slant. She was reinstated at the very end of the week. We put her under close surveillance. In the immediate future, plotting a wedge in hourly data is not very engaging. The three-color flagship index came out on Thursday, from below, in accelerating volumes, before starting to rise again. A definitive exit from the bottom of this bevel is the preferred option. The break, on a very wide gap on Monday, is a first decisive step. This gap was almost entirely filled on Tuesday, in the form of a school pullback.

The looming scenario is now that of a new test of 6,760 points, an increasingly fragile technical floor.

FORECAST

In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.

This bearish scenario is valid as long as the CAC 40 index is trading below the resistance at 7036.00 points.

Hourly data chart

Chart in daily data

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